Higher liquidity does not support prices in Brazil

Even with higher market liquidity, Brazilian cotton prices kept decreasing during the first fortnight of March because of the pressure from byuers. Between February 27th and Mar 16th, the CEPEA/ESALQ Index for the type 41-4 (delivered in Sao Paulo city, payment in 8 days - the most common commercialization in Brazilian market) dropped 1.9 percent in Real, closing at 1.1306 real or 0.4965 dollar per pound on Mar 16th. Some growers enlarged their supply in order to make cash. Other ones aim to sell out ending stocks from 2007/08 crop.

To export, trades remained moving slowly. According to Secex (Foreign Trade Secretariat), in February, Brazilian cotton exports totaled 44.2 thousand tons, a reduction of 4.3 percent compared to January, however, an increase of 20.7 percent in relation to February 2008. (Cepea - Brazil)



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